Search form

Search form

Tax Analysts Blog

The War on Wealth Is Not New

A few days ago, billionaire venture capitalist Tom Perkins really stepped in it. "I would call attention to the parallels of fascist Nazi Germany to its war on its 'one percent,' namely its Jews, to the progressive war on the American one percent, namely the 'rich.'" Perkins wrote in a letter to The Wall Street Journal. "This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendant 'progressive' radicalism unthinkable now?"

You’d think that conservatives would be better at the whole rhetoric thing. After all, they’re the ones who pioneered political reframing, especially during the late, great death tax debate. But apparently they've forgotten one of the cardinal rules: When tempted by Nazi analogies, it's time to step away from the keyboard.

Perkins has since apologized, but he clings to the basic point. "When you start to use hatred against a minority," he insisted, "it can get out of control.”

Paul Krugman has described this sort of hand-wringing as the "paranoia of the plutocrats." He's also pointed out that it's not unusual:

You may say that this is just one crazy guy and wonder why the Journal would publish such a thing. But Mr. Perkins isn’t that much of an outlier. He isn’t even the first finance titan to compare advocates of progressive taxation to Nazis. Back in 2010 Stephen Schwarzman, the chairman and chief executive of the Blackstone Group, declared that proposals to eliminate tax loopholes for hedge fund and private-equity managers were “like when Hitler invaded Poland in 1939."

Krugman is right: Overwrought analogies are a staple of American politics, as are ill-advised epithets.

Consider, for instance, the treatment of Franklin Roosevelt, who was routinely called a communist, fascist, and (most revealing) "a traitor to his class." Indeed, by the end of his first term, FDR was deeply despised by a well-heeled minority of the electorate. As Time magazine noted in 1936 :

Certainly no President in recent times has so bitterly aroused the enmity of a whole class as Franklin Roosevelt has aroused the economically substantial element of the U. S. Regardless of party and regardless of region, today, with few exceptions, members of the so-called Upper Class frankly hate Franklin Roosevelt.

The same might be said of President Obama today. But Roosevelt did a lot more than Obama to earn the enmity of his antagonists. Among other things, FDR was at least as fond of name-calling as his opponents. In his 1936 acceptance speech for the Democratic nomination, he coined a new epithet for his opponents:

These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power. In vain they seek to hide behind the Flag and the Constitution. In their blindness they forget what the Flag and the Constitution stand for. Now, as always, they stand for democracy, not tyranny; for freedom, not subjection; and against a dictatorship by mob rule and the overprivileged alike.

This was strong talk -- far stronger than anything Obama has ever said, or probably even thought. Here's another example, also from the 1936 campaign:

We had to struggle with the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the government of the United States as a mere appendage to their own affairs. We know now that government by organized money is just as dangerous as government by organized mob. Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred.

Clearly, FDR was ready to mix it up with his opponents. And his combativeness extended to the policy arena. In tax policy especially, Roosevelt was ready to pick a fight with privilege. "Our revenue laws have operated in many ways to the unfair advantage of the few," he asserted when asking Congress for a tax hike targeting the rich, "and they have done little to prevent an unjust concentration of wealth and economic power."

Roosevelt went on to offer a theory of wealth that modern-day observers will recognize as a much more pointed precursor to the famous "who built that" debate of the 2012 election. "Wealth in the modern world does not come merely from individual effort," Roosevelt said. "It results from a combination of individual effort and of the manifold uses to which the community puts that effort. The individual does not create the product of his industry with his own hands; he utilizes the many processes and forces of mass production to meet the demands of a national and international market."

Clearly, there's a lot of continuity in American politics. But what seems even more striking is the discontinuity. The 1 percenters of 2014 may think they have reason to hate Obama (and his progressive allies). And in terms of rhetoric, they are clearly challenging their conservative predecessors.

But today's plutocrats have no idea what it means to face a real class warrior.

All views expressed on these blogs are those of their individual authors and do not necessarily represent the views of Tax Analysts. Further, Tax Analysts makes no representation concerning the views expressed and does not guarantee the source, originality, accuracy, completeness or reliability of any statement, fact, information, data, finding, interpretation, or opinion presented. Tax Analysts particularly makes no representation concerning anything found on external links connected to this site.

Office Location

400 S. Maple Ave.
Suite 400
Falls Church, VA 22046

Tax Analysts is a tax publisher and does not provide tax advice or preparation services.